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Impact of Trump’s executive action on Obamacare will depend on agency responses

By Pamela Wolf, J.D.

Wasting no time following his inauguration on January 20, President Donald Trump signed an executive order aimed at unraveling his predecessor’s signature act, the Patient Protection and Affordable Care Act (ACA). The move prompted widespread concern on top of the anxiety already mounting over exactly what will happen to health care coverage all across the nation under a Trump Administration supported by a Republican-dominated Congress that has already put the wheels in motion to roll back so-called “Obamacare.”

How broad is the order? To help break down the executive order and understand its implications for both employers and employees, Employment Law Daily reached out to benefits ace Joy M. Napier-Joyce, a principal in the Baltimore, Maryland, office of Jackson Lewis P.C. “While the Executive Order does not have the power to repeal the ACA, it clearly expresses a directive to agencies to delay, exempt, defer and otherwise not enforce certain provisions of the law that are within their discretion,” she explained.

Napier-Joyce noted that many have considered the order largely targeted at penalty relief for individuals who failed to maintain the necessary coverage under the ACA’s individual mandate. “The Order, however, encourages much broader relief to all who are burdened by the law’s requirements, although it does not specifically mention employers,” she explained.

What does mean for employers? As to how the order will impact employers, the Jackson Lewis attorney said we’re going to have to wait to see how the federal agencies react to it. “Employers will be most interested in knowing whether the IRS will act to delay ACA reporting requirements, which they have done in the past and is within their discretion without formal rulemaking processes,” she pointed out. “Employers will also be eager to understand how the IRS, HHS, and DOL plan to enforce other ACA requirements pending repeal and to what extent the agencies will go beyond their discretion via the rulemaking process to pull back regulatory requirements prior to legislative action.”

“One of the byproducts of the order and its timing will be to further unsettle or destabilize the health insurance market, which will ultimately impact employers in the coverage they offer,” according to the benefits expert.

Pressure on Congress. Napier-Joyce also suggested that the executive order puts additional pressure on Congress to come up with a repeal/replace plan quickly. “Several members of Congress have expressed the desire to make sure that any replacement plan is carefully designed to mitigate some of the negative effects of the repeal,” she observed.

Ripple effect among states. Turning to a broader impact of the executive order, and perhaps more generally, the move to unravel Obamacare, Napier-Joyce said, “We may also see states begin to act to fill in the gaps in terms of coverage mandates that may be lost in the dismantling of the ACA.” She pointed for example, to the executive order issued by New York Governor Cuomo that requires insurers to cover contraceptives and medically necessary abortions under health insurance policies issued in New York.

Stay tuned. Undoubtedly, other impacts of President Trump’s first executive action on the Obamacare front will soon become evident as stakeholders focus their radar. “We are carefully watching agency reactions to the executive order as they both directly and indirectly impact employers,” Napier-Joyce said.